- 2 -
|
2020 IA 100D Instructions, page 2
Instructions for 2020 IA 100D – Iowa Capital Gain Deduction Sale of Timber
The Iowa capital gain deduction is subject to contract to cut timber and not the value of
review by the Iowa Department of Revenue. associated land.
The Department will use this form to verify that Line 1. Check the box to indicate whether the
the taxpayer(s) qualifies for the deduction. The capital gain is from a C corporation.
Department may request additional information Line 2. Indicate whether the C corporation
if needed. capital gain was from the liquidation of assets
This completed form must be included with the which are recognized as a sale of assets
IA 1040 to support the Iowa capital gain under IRC section 331 or from certain stock
deduction claimed. Complete a separate IA sales which are treated as an acquisition of
100D for each sale of timber. Complete the assets under IRC section 338.
form each year of a qualifying installment sale, Line 3. If married filing jointly and both spouses
including all parts. are the only owners, check yes. If married filing
For taxpayers filing separately on the same separately and both spouses are owners, check
return, each spouse must complete an IA 100D no; each spouse must complete an IA 100D and
for the Iowa capital gain deduction claimed indicate on line 3 the separate ownership
based on the spouse’s ownership percentage. percentage of that spouse.
Flowcharts to assist in determining if a gain Line 4. Enter the taxpayer’s ownership
qualifies are also available in the expanded percentage of the property sold at the time of
instructions online. For more information on the the sale to three decimal places (for example:
Iowa capital gain deduction, see the 50.0%; 33.3%). If not the sole owner, the
instructions below and Iowa Administrative taxpayer’s ownership percentage must be less
Code rule 701—40.38. than 100% and greater than 0%.
Part I: Sale of Timber Line 5. Enter the names of all persons and
Line 1. Enter the address or legal description entities that owned the property at the time of
from where the timber was or will be harvested. sale. If the capital gain flowed through to the
If providing a legal description, also provide a taxpayer from a partnership, S corporation,
general description of the property location in limited liability company (LLC), estate, or trust,
relation to a major road or town and the county. all owners of the entity must be reported.
Line 2. Enter the acquisition date and sale Line 6. Check all boxes that indicate how the
date for the timber, as indicated in supporting taxpayer acquired the timber. If “Other”, explain
documentation. how the taxpayer acquired the timber.
Line 3. Enter the length of the holding period in Line 7. Enter the names of all persons and
years and months. The holding period must be entities that purchased the timber.
at least 12 months to qualify for the Iowa Line 8. Check the box to indicate whether the
capital gain deduction. If the ownership period capital gain comes from an installment sale. If
indicated in Part I, line 2 is less than 12 “Yes,” enter the date of the first installment, the
months, include a separate statement expected date of the final installment, the total
explaining why the ownership period differs capital gain generated by the sale, and the
from the holding period. capital gain the taxpayer received during tax
Line 4. Explain how the purchaser intends to year 2020. Do not include any interest
use the timber (for example: “Lumber”, received.
“Christmas Trees”). For more information see Line 9. Enter the amount of the taxpayer’s
Iowa Administrative Code rule 701—40.38(6). capital gain deduction claimed. Note that the
Line 5. Check the box to indicate whether the deduction applies to the net capital gain from a
taxpayer reported the capital gain under IRC sale. Any nonrecaptured losses are treated as
section 1231. ordinary income and are not eligible for the
Iowa capital gain deduction. The eligibility of
Part II: Details of Timber Sold Excluding
the Iowa capital gain deduction reported here
Land Value
may be subject to further examination by the
This deduction is only available for capital
Department.
gains realized on the sale of cut timber or a
41-158b (08/31/2020)
|